0001573516-26-000090
SEC filingNet income fell to $470.6M from $502.5M, driven by higher expenses offset by improved fuel and merchandise contributions.
Murphy USA Inc. is an independent publicly traded company focused on the marketing of retail motor fuel and convenience merchandise. As of December 31, 2025, it operated 1,800 retail stores across 27 states, with 1,649 branded as Murphy USA or Murphy Express and 151 as QuickChek. The company was spun off from Murphy Oil Corporation in 2013 and acquired QuickChek in January 2021. Its business model emphasizes low-price, high-volume fuel sales complemented by a focused convenience offering in small-store formats.
The company operates in a single reporting segment: Marketing. This segment includes all retail marketing stores and product supply and wholesale assets. No revenue share by segment is provided in this section, but details are referenced in Note 22 to the financial statements.
Murphy USA sells motor fuel primarily under the Murphy USA and Murphy Express brands, and also operates QuickChek stores with a broader food and beverage offering. The company has digital loyalty programs: Murphy Drive Rewards and QuickChek Rewards. Nicotine products are a significant merchandise category, described as a “robust nicotine business” with high-volume performance.
Fuel is sold through company-operated retail stores and to unbranded wholesale customers via a mixture of company-owned and third-party terminals and pipeline positions. The company purchases over 78% of its merchandise from a single wholesale grocer, Core-Mark, under a contract renewed through 2031. Key customer relationships include a strategic proximity to Walmart, with the majority of stores located near Walmart Supercenters and participation in the Walmart+ fuel discount program.
The U.S. retail gasoline and convenience store industry is highly fragmented and competitive. Murphy USA competes with other retail fuel chains, supermarkets, discount club stores, mass merchants, and quick-service restaurants. Competitors include integrated companies with refining operations that can offset marketing losses. The company’s competitive advantages include its low-price, high-volume strategy, low-cost operating model, and distinctive fuel supply chain capabilities.
Murphy USA’s strategy is built on five pillars: (1) Grow organically by building 45-55 NTI locations and up to 30 raze-and-rebuilds annually; (2) Diversify merchandise mix, particularly by enhancing food and beverage offerings at QuickChek; (3) Sustain cost leadership through efficiency initiatives to beat inflation on per-store operating costs; (4) Create advantage from market volatility by leveraging supply chain capabilities; and (5) Invest for the long term with a conservative financial structure and return of capital via dividends and share repurchases.
As of December 31, 2025, the company employed approximately 16,900 people, comprising 5,900 full-time and 11,000 part-time employees. The company emphasizes a culture based on Principles of Integrity, Respect, Citizenship, and Spirit. Talent management includes succession planning, development opportunities, and competitive benefits packages including health, retirement, and paid leave.
For the fiscal year ended December 31, 2025, the Company reported net income of $470.6 million ($24.10 per diluted share) on revenue of $19.4 billion, compared to net income of $502.5 million ($24.11 per diluted share) on $20.2 billion of revenue in 2024. Revenue decreased 4.2% primarily due to a 7.5% decline in average retail fuel prices, partially offset by a 2.1% increase in merchandise sales and a 0.6% increase in fuel volumes. Cost of sales fell 5.1% in line with lower fuel costs.
The decline in net income was driven by higher store operating expenses (up $43.9 million or 4.1%), higher depreciation and amortization (up $28.8 million or 11.6%), and $12.6 million in restructuring expenses. These were partially offset by higher merchandise contribution (up $35.3 million to $869.0 million), higher total fuel contribution (up $19.0 million to $1.49 billion), lower income tax expense, and lower SG&A expenses.
The Marketing segment generated total operating revenues of $19.4 billion in 2025, down from $20.2 billion in 2024. Segment income from operations was $757.1 million compared to $760.6 million, a slight decrease of 0.5%. Operating margin remained stable at approximately 3.9%.
Fuel contribution increased 1.3% to $1.49 billion, as retail fuel margins held steady at 28.1 cents per gallon while total retail fuel volumes grew 0.6% to 4,849 million gallons. PS&W contribution including RINs improved by $11.4 million to $1.49 billion, driven by better spot-to-rack margins. RIN sales generated $211.7 million in other operating revenue, up from $129.6 million in 2024.
Merchandise sales increased 2.1% to $4.30 billion, with unit margins expanding to 20.2% from 19.8%. Total merchandise contribution rose 4.2% to $869.0 million. On a same-store sales basis, merchandise sales declined 0.3% due to lower nicotine and non-nicotine product sales, but margins improved 2.3%.
Corporate and other assets loss widened to $106.7 million from $77.7 million, primarily due to higher net interest expense, restructuring charges, and increased depreciation.
Management expects total capital expenditures for 2026 to range from $475 million to $525 million, with $375-$400 million allocated to retail growth, $80-$95 million for maintenance capital, and the remainder for corporate investments. Funding is expected primarily from operating cash flow, supplemented as needed by borrowings under the $750 million revolving credit facility.
The Company highlighted its low-price fuel model as a competitive advantage during periods of rising crude prices. No specific revenue or earnings guidance was provided. The Board declared a quarterly dividend of $0.63 per share ($2.52 annualized) and authorized a new $2.0 billion share repurchase program through 2030. The Company's leverage ratio of 2.11x at year-end remains well below the 3.0x threshold that would restrict dividend payments or share repurchases.
As of December 31, 2025, Murphy USA held $28.9M in cash and equivalents with no marketable securities. Total debt stood at $2,182.6M (net of unamortized issuance costs), including $600.0M term loan due 2032, $500M 4.75% notes due 2029, $500M 3.75% notes due 2031, $300M 5.625% notes due 2027, and $183.0M drawn on the revolving credit facility. Shareholders' equity was $623.5M, down from $840.1M in 2024 mainly due to $652.0M in share repurchases partly offset by net income of $470.6M. Inventory totaled $413.0M, with a LIFO reserve of $162.6M. The company's total leverage ratio was a comfortable 2.11x, well below the 5.0x covenant.
Murphy USA reported total purchase commitments of $386.9M. Capital expenditure commitments were $356.8M, predominantly for future store construction ($308.3M) and improvements to existing stores ($37.8M). Additionally, take-or-pay contracts for terminal supply have minimum annual payments of $9.0M in 2026, $7.0M in 2027, $5.2M in 2028, $5.1M in 2029, and $3.8M in 2030, aggregating $30.1M over the remaining 4.8-year term.
In 2025, Murphy USA repurchased 1,536,701 shares for $652.0M at an average price of $424.28 per share. As of December 31, 2025, $291.9M remained under the 2023 $1.5B authorization, and on October 29, 2025, the Board approved a new $2.0B authorization effective upon completion of the prior program. Dividends paid totaled $41.5M, or $2.15 per share declared, up 20.1% from $1.79 in 2024. Net debt increased $334.2M due to $2,982.3M in borrowings (including the new $600M term loan) and $2,654.4M in repayments. Capital expenditures were $439.6M, representing 2.27% of total revenues.
The company operates a single reportable segment: Marketing. Segment revenues were $19,383.5M in 2025, a 4.2% decline from $20,243.7M in 2024, driven by lower petroleum product sales. Segment income before income taxes was $749.1M, yielding a 3.9% operating margin. Geographic mix was not disclosed at the note level.
Murphy USA's business is heavily dependent on its relationship with Walmart, as most of its Murphy branded stores are located near Walmart Supercenters. Any deterioration in this relationship or reduction in Walmart traffic could materially affect sales. The company also faces intense competition from other fuel retailers, including non-traditional players like supermarkets and discount stores. Competitive pressures have already led to impairment charges of $5.3 million in 2025 and $8.2 million in 2024, primarily in the Northeast markets.
The company relies on a single supplier, Core-Mark, for over 78% of its merchandise, including nicotine products and groceries. A disruption in supply from Core-Mark could have a material adverse effect due to limited alternative suppliers. Additionally, Murphy USA depends on third-party pipelines and terminals for fuel supply; disruptions from weather, accidents, or government actions could increase costs or interrupt operations. The company's growth plans to open 45-55 new stores in 2026 depend on a successful project pipeline, which faces risks from permitting delays and construction constraints.
Sales of nicotine products are a significant part of merchandise revenue. Potential tax increases, bans, or reductions in manufacturer rebates could materially reduce margins. The company is also subject to stringent environmental laws regarding fuel storage and emissions, which could lead to significant cleanup costs and liability. Climate change regulations and fuel economy standards may reduce long-term demand for gasoline.
Murphy USA has substantial debt obligations, with restrictive covenants that limit financial flexibility, including restrictions on dividends and additional borrowings. The company's below-investment-grade credit ratings increase borrowing costs and reduce funding sources. Revenue from Renewable Identification Numbers (RINs) is highly variable and not core to the business model, but fluctuations can impact income. Credit card fees, which are a percentage of transaction value, reduce profitability, especially when fuel prices are high.
As a retailer processing large volumes of customer data, including credit card information, Murphy USA faces significant cybersecurity risks. A breach could harm reputation, lead to litigation, and result in regulatory fines. The company relies on technology systems for operations; a disruption could impair business continuity.
The provided document content does not include the consolidated statements of cash flows. The excerpt only contains an index and exhibits listing. Therefore, no analysis can be performed.